Innovair Aviation Ltd. v. United States
2011 U.S. App. LEXIS 1536
| Fed. Cir. | 2011Background
- Innovair challenged the Government’s seizure of its Technology Licensing Agreement (TLA) and related assets under 21 U.S.C. § 881 as a Fifth Amendment taking.
- The Government seized four Air Colombia planes, including Aircraft N95BF, in 1990 on drug-money-forfeiture grounds and later added the TLA to the in rem action.
- Arizona Court approved a substitute res bond to transfer the TLA to BTC, extinguishing Innovair’s rights and leading to a forfeiture judgment in favor of the Government.
- Innovair unsuccessfully challenged the substitute res bond in the Arizona proceedings and pursued appeals in the Ninth Circuit in relation to valuation and standing.
- Innovair then filed a takings suit in the Court of Federal Claims, alleging a taking without just compensation and seeking the full value of the TLA.
- The Federal Claims Court initially held jurisdiction existed but the Ninth Circuit later determined jurisdiction was limited to the bond amount; the district court’s extinguishing clause need not be reviewed by the CFC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court of Federal Claims has jurisdiction over Innovair’s takings claim | Innovair relies on Vereda to claim CSA precludes CFC review | CSA framework preempts Tucker Act review of in rem forfeiture | Court of Federal Claims lacks jurisdiction |
| Whether the transfer of the TLA was a taking for public use with just compensation | Innovair was an innocent owner and the transfer was a per se taking | Transfer under substitute bond followed legal process and extinguished interests | Not reached on this appeal due to jurisdiction dispositive issue |
| Whether the 10% discount rate applied to value the TLA was proper | Innovair disputed the valuation methodology | Discount rate within trial court’s discretion | Not reached on this appeal due to jurisdiction dispositive issue |
Key Cases Cited
- Vereda LTDA v. United States, 271 F.3d 1367 (Fed. Cir. 2001) (CSA scheme precludes Tucker Act jurisdiction for in rem forfeitures; review is within CSA framework)
- Allustiarte v. United States, 256 F.3d 1349 (Fed. Cir. 2001) (Lack of jurisdiction for takings claims that require scrutinizing court actions)
- United States v. Basler Turbo-67 Conversion DC-3 Aircraft, 906 F. Supp. 1332 (D. Ariz. 1995) (Arizona forfeiture proceedings; extinguishing clause and substitute res bond issues)
- AmeriSource v. United States, 525 F.3d 1149 (Fed. Cir. 2008) (Police power seizure does not constitute a public use taking under Fifth Amendment)